Re­vealed – the new tech bat­tle­ground. Your home.

The lat­est gold rush has be­gun – to take con­trol of your lights, heat­ing, se­cu­rity … and cat tray, writes James Tit­comb in Las Ve­gas

The Sunday Telegraph - Money & Business - - Front page -

Last week, more than 180,000 peo­ple de­scended on Las Ve­gas to see what the fu­ture holds. The Con­sumer Elec­tron­ics Show, a week-long fes­ti­val of gad­gets, tele­vi­sions and cars, is one of the big­gest fix­tures in the tech cal­en­dar. More peo­ple at­tend than there are ho­tel rooms in the city.

So if there is a place to gauge the pulse of the elec­tron­ics in­dus­try, this is it. Ev­ery year, at­ten­dees and an­a­lysts try to use CES as a barom­e­ter for where the world is go­ing, and what the next big thing will be. In spite of the in­creas­ing grip that de­vices have over our lives, man­u­fac­tur­ers have been miss­ing that eureka mo­ment for some time. The touch­screen smart­phone rev­o­lu­tion was kicked off by the iphone 12 years ago, and there have been no short­age of false dawns since. Tablet sales spiked but have been in de­cline since 2014. Vir­tual re­al­ity has been a bit­ter dis­ap­point­ment.

The new gold rush, if this year’s show­case is to be be­lieved, is the smart home. The cav­ernous show floor hosted hun­dreds of com­pa­nies ex­hibit­ing their lat­est con­nected ap­pli­ances, house­hold items and fit­tings. Not one but two com­pa­nies un­veiled smart cat-lit­ter trays, one of which, the Lavviebot, “au­to­mat­i­cally mon­i­tors lit­ter and waste lev­els” in or­der to re­lay the in­for­ma­tion to a smart­phone app. A smart sofa made by the French com­pany

Mili­boo is ca­pa­ble of wire­lessly Who’s there? The Ne­tatmo smart video door­bell charg­ing a smart­phone, and can be con­trolled by speak­ing to it.

If this is the fu­ture, it is not one that ev­ery­one is on board with. As the show got un­der way, the box-of­fice ac­tor Chris Evans, best known for his role as Mar­vel’s Cap­tain Amer­ica, tweeted: “Dear tech­nol­ogy … I don’t need a ‘smart’ fea­ture on my TV, ther­mo­stat, lights, mu­sic, re­frig­er­a­tor, se­cu­rity cam­eras, and f-ing car … You’re not worth it.” More than 360,000 peo­ple favour­ited the com­ment to sig­nal their agree­ment – twice the num­ber of techies at CES. Home au­to­ma­tion is far from a new idea. The Clap­per, an elec­tri­cal switch ac­ti­vated by sound, was re­leased in the mid-eight­ies. Mo­torised win­dow blinds go back even fur­ther. But many pun­dits believe the tech­nol­ogy has reached a tip­ping point.

“We’re start­ing to see that hockey-stick growth,” says Jitesh Ubrani, an an­a­lyst at tech re­searchers IDC, re­fer­ring to a phe­nom­e­non of­ten seen in a new tech­nol­ogy where its adop­tion rate ac­cel­er­ates dra­mat­i­cally. “Adop­tion is grow­ing, it’s com­ing from a small base but we don’t see it slow­ing down.”

Name a house­hold item and an en­ter­pris­ing tech start-up has made it “smart” by giv­ing it an in­ter­net con­nec­tion and a smart­phone app. Only a hand­ful have gained trac­tion out­side of trade shows, how­ever.

They in­clude smart light­ing sys­tems, which al­low users to turn off or dim lights over the in­ter­net; smart ther­mostats, which can be set to turn off the heat­ing when ev­ery­body leaves the house; and smart se­cu­rity sys­tems. Locks and door­bells can be set to grant tem­po­rary ac­cess to guests or pack­age couri­ers, while smart se­cu­rity cam­eras can stream video feeds to some­one half­way around the world, and alert them when there is un­ex­pected move­ment in the gar­den.

The mar­ket re­mains rel­a­tively small. Ac­cord­ing to Or­bis Re­search, global sales of smart home prod­ucts were val­ued at $36bn

(£28bn) in 2017, less than a

10th of smart­phone sales.

But un­like the smart­phone, their mar­ket is grow­ing. In

2023, an­a­lysts say, smart home sales could be worth $150bn. IDC es­ti­mates al­most 650m smart home prod­ucts were sold last year, a num­ber set to dou­ble in four years. Some of the big­gest tech­nol­ogy com­pa­nies are chas­ing a slice of the ac­tion. In 2014, Google bought Nest, a pi­o­neer in smart ther­mostats, for $3.2bn. Last year, Ama­zon paid $1bn for Ring, which makes cam­er­ae­quipped door­bells. Smart home gad­gets have

be­come cheaper and more ca­pa­ble for some of the rea­sons that brought on the smart­phone rev­o­lu­tion – the rise of China’s elec­tron­ics hub of Shen­zhen, the grow­ing ca­pa­bil­i­ties of low-power mi­crochips and the plum­met­ing cost of com­po­nents.

But an­other con­tri­bu­tion from Ama­zon and Google, the age of the voice as­sis­tants, has tur­bocharged their pop­u­lar­ity. Ama­zon’s Alexa ser­vice de­buted on its voice­con­trolled Echo speaker in 2014, and 100m de­vices that run the soft­ware have since been sold. The ri­val Google As­sis­tant fol­lowed two years later. Last week, Google said the soft­ware will soon be on a bil­lion de­vices (the com­pany has a huge head-start on Ama­zon since four in five phones sold around the world run its An­droid op­er­at­ing sys­tem, which comes with the As­sis­tant).

Be­fore voice as­sis­tants, smart home de­vices were largely con­trolled with a smart­phone app or even by send­ing a text mes­sage. The re­sults were clunky, and rarely of­fered more con­ve­nience than the “dumb” home al­ter­na­tive. Voice as­sis­tants meant lights could be turned off, or the tem­per­a­ture changed, by bark­ing a com­mand, so long as a smart speaker was within range. Mak­ers of smart home de­vices have also scram­bled to make their de­vices com­pat­i­ble with Ama­zon and Google’s sys­tems, which has al­lowed both to serve as a sin­gle con­trol cen­tre for an ar­ray of prod­ucts.

“Smart as­sis­tants are one of the big­gest cat­a­lysts; it’s sim­pli­fied the in­ter­face,” says Ubrani.

Smart speak­ers them­selves have been one of the fastest-grow­ing smart home cat­e­gories. Al­most 100m were sold last year world­wide. Ac­cord­ing to Deloitte, 13pc of UK house­holds had one in 2018, up from 5pc the year be­fore. Smart home de­vices are rapidly fall­ing in price, read­ily avail­able and now easy to use. How­ever, one ques­tion re­mains: whether con­sumers ac­tu­ally want them out­side of Sil­i­con Val­ley.

“Adding con­nec­tiv­ity on its own is not use­ful,” says Paul Lee, tech­nol­ogy spe­cial­ist at Deloitte. “A light switch is some­thing you flick on or off once or twice a day. It’s a fun ex­er­cise but I would not say it’s a main­stream thing.”

Lee says the ob­jects that ben­e­fit from be­ing con­nected to the in­ter­net are those used of­ten, point­ing to the growth of con­nected tele­vi­sions and mu­sic speak­ers. “The most com­mon ap­pli­ca­tion of smart speak­ers is con­nected mu­sic. A lot of peo­ple have his­tor­i­cally lis­tened to the ra­dio for a cou­ple of hours a day. Ad­just­ing the ther­mo­stat is not some­thing peo­ple do for an hour a day.”

Deloitte says just 6pc of UK house­holds have a smart ther­mo­stat, and 4pc a smart light­ing sys­tem, barely an in­crease on the year be­fore. Smart fridges and ovens have failed to take off.

Ubrani says the com­pa­nies sell­ing smart home de­vices are well ahead of the av­er­age con­sumer. He says many of the cur­rent sales of smart plugs and lights can be put down to them be­ing sold in bun­dles with the speak­ers con­sumers are re­ally af­ter.

Ac­cord­ing to the con­sul­tancy OC&C, while 95pc of smart-speaker own­ers in the UK have used them to lis­ten to mu­sic, less than half use them as a smart-home hub. If the smart home does move be­yond a tech-savvy mi­nor­ity, an­other prob­lem is likely to rear its head. In­ter­net of Things de­vices are no­to­ri­ous for their lack of se­cu­rity, pri­vacy and re­li­a­bil­ity, de­spite the sen­si­tive ar­eas, such as home surveil­lance, in which they op­er­ate. The in­dus­try has been plagued by a litany of er­rors. Just last week it emerged that Ama­zon’s Ring door­bell com­pany had given its se­cu­rity teams in Ukraine and the US live ac­cess to cam­era feeds. Last year, a glitch in Yale’s smart locks led cus­tomers to com­plain they had been locked out of their homes. In 2016, a soft­ware glitch left own­ers of Nest ther­mostats with­out heat­ing. Com­pa­nies are hop­ing to solve some of these is­sues. Arm, the Bri­tish mi­crochip com­pany whose de­signs are be­ing used in many smart home de­vices, last year pro­posed an in­dus­try-wide ef­fort to make se­cu­rity a pri­or­ity. “There was no real stan­dard­i­s­a­tion, no com­mon ap­proach that any­one [was] tak­ing,” says Chet Babla, an Arm ex­ec­u­tive. “We were think­ing, ‘we’re go­ing to have this apoc­a­lypse if we don’t step in and do some­thing’.” It re­mains to be seen how suc­cess­ful its ef­forts are. But it is easy to see how man­u­fac­tur­ers could skimp on se­cu­rity as an­other chal­lenge emerges. As sales in­crease, more com­pa­nies are likely to jump on to the smart home band­wagon, in­creas­ing com­pe­ti­tion and driv­ing down prices. This could lead to man­u­fac­tur­ers cut­ting cor­ners, but it will also drive down profit mar­gins, a phe­nom­e­non re­peat­edly ob­served in the elec­tron­ics in­dus­try in smart­phones and lap­tops. Com­pa­nies are al­ready think­ing about how else to mon­e­tise the smart home. Smart cam­era mak­ers, for ex­am­ple, are sell­ing sub­scrip­tions that al­low users to store days of old footage, in­stead of it be­ing deleted af­ter it is watched. “Many of [them] are go­ing to come to the hard re­al­i­sa­tion that sell­ing hard­ware is not enough,” says Ubrani. “The money may be there now, but it won’t be to­mor­row.”

‘Peo­ple lis­ten to the ra­dio for a cou­ple of hours a day. Ad­just­ing the ther­mo­stat is not some­thing peo­ple do for an hour’


Ama­zon Echo Plus is a smart speaker pro­grammed with Ama­zon’s ar­ti­fi­cial­in­tel­li­gence as­sis­tant app Alexa to con­trol home ap­pli­ances such as TVS and lights by voice – al­though most peo­ple just use them to stream mu­sic

A Galaxy Home smart speaker by Sam­sung

Chi­nese ecom­merce firm Alibaba’s Tmall Ge­nie smart home speaker, dis­played at the com­pany’s booth at the 2019 Con­sumer Elec­tron­ics Show in Las Ve­gas, uses the in­tel­li­gent per­son­alas­sis­tant ser­vice Alige­nie

Ama­zon Echo Spots are pow­ered by Alexa

Moodo fra­grance dif­fusers, con­trolled by smart­phone

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